Key changes

A summary of the key changes included in the Incorporated Societies Act 2022

The Incorporated Societies Act 2022 (the new Act) was passed on 6 April 2022 but societies don’t need to do anything just yet. There is a transition period of several years that allows societies time to become familiar with, and prepare for, the new regime. Below is a summary of the key changes you should know about.

On this page:

Comparisons between 1908 Act and 2022 Act

Topic 1908 Act 2022 Act
Minimum number of members 15 10
Internal disputes No requirement to have internal dispute resolution procedures A society must have adequate dispute resolution procedures, and these must be specified in its constitution
Committee requirement Committee not required Must have a committee of at least 3 members
Independent members of committee N/A Unless regulations1 prescribe otherwise, majority of committee must be society members
Concept of an officer Not explicitly defined Includes all committee members, as well as others, for example, treasurer, CEO
Officers’ duties Duties are not clearly articulated Six broadly expressed duties modelled on directors’ duties in the Companies Act 1993 to:
  1. Act in good faith and in the best interests of the society
  2. Exercise powers for proper purposes only
  3. Comply with the Act and the constitution
  4. Exercise reasonable care and diligence
  5. Not create a substantial risk of serious loss to creditors
  6. Not incur an obligation the officer doesn’t reasonably believe the society can perform
Annual General Meeting (AGM) No guidance Must be held within 6 months of the society’s financial year end
Financial statements filed with Registrar Must be filed annually Must be filed within 6 months of the society’s financial year end
Annual return No requirement to file an annual return Must be filed annually as outlined in section 109
Manner of preparing financial statements A society is not required to apply XRB accounting standards, unless it’s also a registered charity  Only a 'small society' not registered as a charity is exempt from using XRB accounting standards 
Distribution of surplus assets2 after winding up Surplus assets can be given to any party  Surplus assets can be given to any party 
Amalgamations No legislative framework for amalgamations of 2 or more societies Amalgamations can take place as outlined in the Companies Act 1993, but follow a more simplified process
Criminal offences Generic offences set out in the Crimes Act 1961 Six offences that target egregious conduct including:
  1. Making false statements
  2. Fraudulent use or destruction of property
  3. Falsification of documents
  4. Defrauding of creditors
  5. Improper use of ‘incorporated’ or its Te Reo version ‘manatōpu’
  6. Breaching of a banning order

Comparison notes

  1. The regulations are expected to be finalised before October 2023
  2. Surplus assets are all assets remaining after the society’s outstanding debts are paid.

Members’ consent

Members will need to give consent to become a member of a society. Don’t panic too much about this – for example, filling in an application form will generally be considered to amount to consent. By contrast, you can’t specify in your constitution that, say, everybody who lives within your suburb is deemed to be a member of your society.

Committee and officers

  • Each society will need to have a governing body (for example, a committee) — it won’t be enough just to have officers.
  • Committees will need to have at least 3 members and the majority of the committee members must be members of the society.
  • The new law sets out who qualifies to be an officer of a society.
    • A person must consent in writing and certify that they are not disqualified.
    • They must be 16 years of age or older.
    • A person cannot be:
      • an undischarged bankrupt
      • prohibited from being a director or promoter of a company
      • disqualified from being an officer of a charitable entity
      • convicted and sentenced for certain offending (for example, a crime involving dishonesty)
      • subject to particular orders (for example, a banning order)
      • unable to comply with any qualifications for officers contained in the society’s constitution.
  • The officers will also have defined duties similar to those of company directors including, such things as acting in good faith and in the best interests of the society or club. These duties have always existed – they have been set out clearly in legislation for the first time.

Contact person for the society

Each society will be required to have at least one contact person whom the Registrar of Incorporated Societies can contact when necessary. The contact person won't need to be an officer of the society.

New financial reporting standards

Once a society reregisters, it will have to start using External Reporting Board (XRB) accounting standards in its financial statements, unless it qualifies as a ‘small society’. For example, imagine a society (that is not a small society) is preparing financial statements for a financial year of 1 July 2023 to 30 June 2024 (FY 2023-2024). If it reregisters in August 2024, then it will have an obligation under the 2022 Act to file its financial statements for FY 2023-2024 by 30 December 2024 (6 months after its balance date). Those financial statements will need to comply with XRB standards.

A 'small society' is defined in section 103 of the Incorporated Societies Act 2022 . Under this provision, in any given financial year, a society is considered small if the following criteria apply:

  1. it spent less than $50,000 in each of the 2 preceding financial years, and
  2. it had current (that is, liquid) assets of less than $50,000 at the end of the 2 preceding financial years, and
  3. it is not a 'donee organisation' for tax purposes and/or a registered charity.

Example 1 - 'Small society'

X-Ville Squash Club is an incorporated society whose financial year ends on 31 December.

It reregisters in 2024 and early in 2025 begins preparing its 2024 financial statements. It spent around $5,000 in 2022 and $9,000 in 2023 and has not received 'donee status' from Inland Revenue. It therefore meets the first and third criteria for being a small society.

In terms of assets, it had around $15,000 in the bank at the end of 2022 and around $20,000 at the end of 2023 (liquid assets), and also owns a squash court building worth $170,000 (fixed assets). Because the second limb of the test for a small society only considers liquid assets, the society meets the second criterion for being a small society.


For the purposes of its 2024 financial year, X-Ville Squash Club is a small society and so need not follow XRB accounting standards.

Example 2 - Not a 'small society'

Y-Ville Golf Club is an incorporated society whose financial year ends on 31 December.

It reregisters in 2025 and early in 2026 begins preparing its 2025 financial statements. Although it has not received 'donee status' from Inland Revenue, and spent only around $30,000 in 2023, it spent around $55,000 in 2024. It also had around $500,000 in the bank at the end of 2023 and around $450,000 at the end of 2024 (liquid assets).

While the society meets the third criterion for being a small society, it does not meet the first or second.


For the purposes of its 2025 financial year, Y-Ville Golf Club is not a small society and so will need follow XRB accounting standards.


New auditing requirements

Societies not registered as charities

Under the 1908 Act, societies that are not registered as charities do not have to have their financial statements checked by an independent auditor. Under the 2022 Act, that will change — a society not registered as a charity will have to have its financial statements for a given year 'audited' if, in each of the 2 preceding years, its total operating expenditure exceeds a certain threshold. That threshold will be set by regulations in 2023. At this stage, we anticipate publishing a first, high-level consultation document around August 2022 and, based on the feedback we receive, a draft set of regulations around April 2023.

Societies registered as charities

Societies that are registered as charities already have to have their financial statements examined by an independent auditor in some circumstances. Sometimes they may need to have their statements ‘audited’; other times they may only need to have their statements ‘reviewed’. None of this will change as a result of the 2022 Act. You can find our more information on the Charities Services website .

What an audit is

An audit is where an independent auditor provides their opinion as to whether the financial statements are prepared in accordance with the applicable financial reporting framework. The independent auditor’s opinion is expressed as a positive opinion statement. For example, “In our opinion, the financial statements present fairly, in all material respects,...”

What a review is

A review is less thorough and detailed than an audit, although it must also be undertaken by an independent auditor. An independent auditor conducting a review provides a conclusion as to whether anything has come to their attention to indicate that the financial statements have not been prepared in all material respects, in accordance with the applicable financial reporting framework. The independent auditor’s conclusion is expressed as a negative opinion statement. For example, “Based on the work performed, as described in the report, nothing has come to our attention...”


Documented dispute resolution procedures

All societies will need to have procedures for resolving disputes and other grievances between members as well as between members and the society. These procedures must then be set out in their constitutions (rules).

Schedule 2 of the new Act contains a set of dispute resolution procedures societies may choose to adopt. If a society includes these procedures in their rules, they will be guaranteed to comply with the new Act.

Documented recipient for surplus assets

When a society is wound up, after all debts have been settled, there can be assets that remain, for example, money in the society’s account or land or buildings in its name. These are known as ‘surplus assets’.

All societies will need to choose one or more not-for-profit entities to which such surplus assets will be distributed. These not-for-profit entities must be specified in their constitutions (rules).

Societies will need to reregister

Societies will have some time to transition and complete their reregistration. The reregistration period will run for 2½ years — from October 2023 to April 2026.

The reregistration process will involve reregistering on the Incorporated Societies Register and providing us with an up-to-date constitution (rules document). Until then, societies will continue to operate under the existing legislation (Incorporated Societies Act 1908).

The regulations being developed over the coming months will provide more information about what societies will need to do to reregister.

Before the start of the reregistration period, we will provide detailed information to societies on what's involved in reregistering.

Some of the things you can't do until your society reregisters

Your society won't be able to:

  • reduce its membership to 10 (there have to be at least 15 members, for now)
  • stop using its common seal
  • take appeals against decisions by the Registrar to the District Court (you’ll have to take them to the High Court, for now).

Some of the things you can't do once your society has reregistered

Once your society has reregistered, it won't be able to:

  • ignore complaints from members (you will have to run a dispute resolution process that meets minimum natural justice standards)
  • appoint as an officer a member who:
    • is an undischarged bankrupt
    • has been prohibited from being a director or
    • has been convicted of certain offences.
  • present its financial statements to its members later than 6 months after the end of your financial year
  • after winding up, divide any surplus assets between the members (you will have to give them to a not-for-profit entity named in your rules).

How you can stay up to date

We will update the information here on our website throughout the transition period. You can also choose to receive updates from us directly to your inbox. Alternatively, you can follow us on Facebook.

Sign up to receive updates from us Follow us on Facebook

If you have any questions or comments about these law changes, you can email us at

Published 18 May 2022. Last updated 17 June 2022